Wage gaps between President, faculty need to decrease


Despite Occidental’s high tuition, relatively low endowment and the growing income gap within the institution, President Jonathan Veitch’s 2011 salary was in the 79th percentile for the presidents of 550 private colleges surveyed, according to a survey conducted by The Chronicle of Higher Education. Though salaries have yet to be set for next year, the college needs to consider pay equity when determining its executive salaries.

“The president’s salary … is based on several factors, including the market rate for college presidents,” Chair of the Board of Trustees Chris Calkins ’67 said.

Deferring to “market rates,” or the salaries at comparable institutions, is a common practice by schools attempting to justify their presidents’ salaries. However, according to the Chronicle of Higher Education, Veitch’s salary has surpassed presidents’ salaries at comparable institutions like Pomona and Williams by over $100,000 since 2010. Pomona’s and Williams’ endowments both exceed $1.8 billion––Occidental’s does not hit $400 million.

However, President Veitch has raised a large sum of money for the college since his inauguration five years ago.

“Since the arrival of President Veitch in 2009, he and his team have raised close to $90 million, funding that is essential to the operations and support of the college,” Calkins said.

Ability to fundraise is of massive importance in a college president. But it may be more productive to focus our attention on the college’s investment strategy so our endowment can at least compete with Pomona’s and Williams’. The college’s investment management expenses totaled around $4 million in 2010-2011. Compared to similar institutions, like Dickinson College and Franklin and Marshall College, not one spent anywhere close to Occidental.

Given the nature of our economy, it seems reasonable to determine an executive’s salary by comparison. Presidents’ salaries should not be determined in comparison to the bureaucratic elite at other colleges, but instead in comparison to the committed member’s of their own institutions.

The American Association of University Professors reported that in 2007, presidential pay grew 35 percent from the previous decade, while the rate of professorial pay grew only 5 percent. According to The Chronicle of Higher Education’s study, the median salary of a full professor at Occidental averaged $112,300 per year––that is about 17 percent as much as Veitch’s salary, suggesting widening income gaps within institutions.

Peter Drucker, an American management consultant, advises managers that the greater the income gap of salaries, the more likely they are to encounter declining morale in employees. This seems especially relevant at institutions where an executive’s scholarly credentials are often rivaled or exceeded by the professors of that institution.

This can “invite a slow decline of morale that can ultimately deter faculty from doing the often-unnoticed work of enhancing the student experience,” chair of the AAUP’s Committee on the Economic Status of the Profession Saranna R. Thornton said to Chronicle.

Some schools are making active efforts to close the gap within their own institutions. Hampton University President Dr. William R. Harvey and his wife, Norma B. Harvey, gave hundreds of thousands of dollars out of their own pocket to the university to support a wage increase for all full-time permanent staff earning less than $9 an hour. Interim President at Kentucky State University Raymond Burse cut his own salary to boost the school’s lowest-paid employees’ wages. St. Mary’s College wants to cap presidential salary at 10 times that of its lowest-paid employees.

When asked about Occidental’s income gap, Calkins spotlighted the school’s commitment to not outsourcing its operations, such as food and facilities, which many colleges do. According to Calkins, this strategy helps the college “keep a measure of support for these employees, including providing good benefits.” He made no mention, however, of the ratio of professorial to presidential pay. Veitch also declined to comment.

The ratio between executive and professorial pay should play a fundamental role in determining a college president’s salary. At the moment, Occidental contracts an outside firm to settle that number. Perhaps it is time to consider insourcing this operation as well, so the college can keep a measure of support for employees, as well as students.

In any other sector of the economy, the best way to ensure quality leadership is to offer an amount of money impossible to resist. But colleges are more than just profit-driven machines. Veitch did not raise $90 million to increase stock values––he raised the money so that Occidental can become an effective breeding ground for tomorrow’s leaders. And that kind of goal requires collaboration and respect among everyone involved: executives, professors, students, parents. In deciding Veitch’s salary, income gaps between the president and Occidental’s other employees need to be taken into account. This gap needs to shrink in order for the college to continue to be at the forefront of higher education.




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